TETFund’s request – The Nation

Should the two per cent education tax levied on the assessable profit of businesses operating in Nigeria to finance the Tertiary Education Trust Fund (TETFund) be increased? This question has become relevant in light of recent hints by the executive secretary of the fund, Professor Suleiman Bogoro, that such a measure may be in the works.
According to Bogoro, the Federal Ministry of Education has sent comprehensive plans to the Presidency in which a rise in the education tax was recommended. The increase could raise the tax to anything between three per cent and four per cent of company profits, and it is apparently in response to mounting pressure on TETFund to increase the scope and depth of its intervention in Nigeria’s tertiary education sector.
In a country undergoing deep spending cuts due to revenue shortfalls stemming from steep declines in the price of crude oil, it is obvious that increased efforts must be made to maximise the generation of internal revenues. An increase in the education tax is in line with this trend, especially given the fact that it is targetted at providing vital funding for tertiary institutions which have long struggled with the challenges of decrepit infrastructure, inadequate equipment and decreased research output.
TETFund’s past achievements in this regard are a clear demonstration of the impact of its interventions on the Nigerian tertiary education system. Federal and state-owned universities, polytechnics and colleges of education across the country provide incontrovertible evidence of TETFund involvement, particularly administrative buildings, laboratories, libraries, vehicles and research grants, most of which are being put to beneficial use.
However, the proposed increase leaves far too many questions unanswered. Was corporate Nigeria consulted on the decision to raise the education tax? To what extent has TETFund’s income been properly accounted for? How well have TETFund finances been utilised by the benefitting institutions? Such questions speak to the vital necessity of ensuring that taxes of this kind are not levied for their own sake. The country is witness to the mess made of the pensions of civil servants and retired soldiers; repeated acts of misappropriation have made billionaires of a few individuals while pensioners have died without receiving their entitlements.
Although it cannot be said with any certainty that TETFund has similarly become a cesspool of corrupt enrichment, there appear to be certain anomalies which seem to indicate that its funds may not have been put to optimum use, in spite of its extensive interventions.
In November 2014, the then Minister of Education, Mallam Ibrahim Shekarau, announced that N7.8 billion, amounting to more than 70 per cent of the N10.052 billion in research funds domiciled in TETFund, had not been touched. If public tertiary institutions have been unable to make use of the funds currently available to them under a two per cent education tax regime, what is the guarantee that they will be able to do so if the tax rises to three per cent or four per cent?
Then there is the issue of exactly what TETFund money is expended on, such as the N27 billion which has been spent on overseas education. It is difficult to justify such a policy when it would clearly have been better to use such funds to rehabilitate indigenous institutions and thereby expand their capacity to train students locally.
TETFund and the benefitting institutions need to do more to ensure that they make full use of what is currently available before demanding more. TETFund must redouble its efforts to publicise the availability of infrastructural development and research funds; the tertiary institutions must retool their systems, procedures and processes to enable them to better utilise the fund’s services.